James Cooke: Are Some UK Property Managers Too Big To Care?
James Cooke MA spent 15 years in the social housing sector, where both his work and personal experiences as a leaseholder gave him a strong insight into how the existing model of property management worked and how it could be improved. To help shape his business he spent six intense months researching the sector and spent time with leaseholders & managing agents. The result? James set up Your Home Property Management offering top quality, customer focused, residential property management services to leaseholders living in east London and Essex.
For this article, James is considering whether, when organisations get too big, does their sheer size make it harder for them to continue to consistently deliver great customer service despite the best intentions of management?
Some large companies such as Tesco, Apple, the AA, all seem to manage to maintain their customer focus while others like Peverel who manage over 150,000 homes and Countrywide who manage 60,000 (and the interest here is the UK property management sector) seem to lose customer service discipline. The irony is that this was never their intention.
The net result of this is that there will be a period of de-centralisation in the property management sector as leaseholders focus on getting the service they want and deserve; and forego any savings that economies of scale may have delivered.
Why do some big companies fail to meet Customer Service expectations?
There are four or five really big residential property management companies in the UK. Between them they deliver management services to well over 250,000 residential leaseholders. Bear in mind there is a total of 1.6m leaseholders in the UK.
Now let’s imagine you’re a senior manager at a property management company with 100,000 homes in management. What do you worry about? Mrs Miggins’ flood at Flat 23 Holborn Court or the macro costs of cyclical maintenance in the South Region? It’s easy to understand how – as property management companies get significant in size – they inevitably lose their eye for detail.
It is recognised that Mrs Miggins has a dedicated ‘front line’ Property Manager employed by Huge Property Management Company Limited, whose job it is to serve her immediate needs and wants. But go up the management chain and very quickly Mrs Miggins’ issue – which to her is actually critical – becomes pretty insignificant.
What if Mrs Miggins’ property was managed by a local, more modest sized company? Let’s call it Joe Bloggs Residential. Would the approach be different? Because Mrs Miggins’ flat takes up a bigger slice of Joe Bloggs Residential’s portfolio Joe is much more likely to care. Plus if Mrs Miggins is unhappy it’ll be much easier for her to flag up her problems with senior management – who similarly will recognise the importance of Mrs Miggins’ business and act accordingly. So the size versus customer service correlation seems to be: big corporate equals facelessness and small local business equals customer facing.
It should be noted some really big companies do get customer service right. Apple is truly enormous and yet enjoys a reputation for delivering great service at the ‘front line’. How? Essentially it’s a result of strong leadership. Everybody at Apple understands, with absolute clarity, the importance of customer service. They also understand (and this is critical) the relationship between good customer service and the success of the company for whom they work. Apple consumers can easily shop elsewhere. Apple employees know this. It’s the same with high street retailers. M&S staff know customers can easily shop next door if they feel the ‘offer’ is better.
Which leads us neatly back to Mrs Miggins who is, in a sense, stuck. Some of the larger property management companies have recognised their customers are to a certain extent ‘captive’. It takes an awful lot of effort for leaseholders to change managing agents. The sheer hassle of changing agents mean leaseholders put off changing management companies. And put up with bad service for too long. Furthermore, some managing agents have been accused of employing tactics to prevent leaseholders from changing agent.
What does all this mean for the property management sector?
It’s widely accepted Peverel has a poor image. Indeed it’s busily trying to reinvent itself (following the recent rescue package). The re-invention, if it means improved services for leaseholders, is commendable. But can it continue to grow at the rate we’ve seen over the last two decades? This blogger believes not.
The internet has levelled the playing field. Leaseholders, from either end of the UK, who in the past may never have had the opportunity to share their common grievances can quickly mobilise themselves and create a powerful voice for change. Websites can be easily and quickly set up. Stories are shared and perceptions cemented.
The sense is that leaseholders are recognising that ‘fit’ is important and they want a property management company who is local, responsive, and customer facing. As a result the sector is ripe for change and there will be a more fragmented property management sector in the future. Ultimately leaseholders will get the service they deserve. That it is starting to happen now is largely down to the digital revolution.
The big players never intended to suffer with poor reputations regarding their customer service and are now attempting to resurrect their customer service image. Leaseholders also realise that ‘fit’ is a significant factor when employing agents and realise that smaller property management companies are more committed and devoted to any given block because it represents, pro rata, a significant slice of the agent’s business.
I believe that it is therefore likely we will see a trend for smaller property management companies as the sector goes through a spell of de-centralisation.
For further information on the services offered by Your Home Property Management please contact James on:
T: 020 8257 7663
M: 07715 328 711